'Innovative' consumer products attract online shoppers

Picture source: ThinkStockWant to buy a refrigerator that also plays music, pocket washing machine that reduce stains instantly or an odd-sized 28-inch LED television?

You may benefit from scanning e-commerce platforms, for several leading consumer durables makers are launching such innovative products exclusively for online shoppers, not only to reduce sales channel conflict but also to ramp up their dull sales growth numbers. This is in stark contrast to the earlier strategy that restricted online differentiation to just design, colour or model names.

Companies including Tata-owned Voltas, Godrej Appliances, Haier, Whirlpool and Videocon appear to have taken notice of 50% growth in online sales this year till Diwali, which accounted for 5% of total industry sales and indicated that e-commerce can be a big sales channel for white goods and televisions.

“Many step-through categories like unconventional tonnage or star rating, relatively smaller capacities and more contemporary designs are getting more online traction,” said Voltas’s appliances business head of marketing and key accounts Deba Ghoshal. “This is due to many first-time buyers and younger demographic consumers choosing online as their preferred medium,” he said.

Till earlier this year, white goods makers where fighting with e-commerce firms to stop rampant discounting, but only to later sign business deals to supply exclusive models. And now, the firms have started product innovation to create a wider gap with bricks-and-mortar trade, which is still the primary revenue source for these firms. Godrej Appliances’ business head Kamal Nandi said companies have to differentiate their product portfolio for every channel, since just changing model names will not call for different price points and will only increase channel conflict.

Citing examples, Nandi said Godrej has built music-player integrated refrigerators or washing machines with different capacities exclusively for online which have got huge traction. Similarly, Haier recently launched a new product category — pocket washing machine for removing food and oil stains, dirt or wine stains instantly — on Snapdeal.

Industry executives said the Korean duo — LG and Samsung — have still not adopted this strategy for their appliances and television business, though they have done it for the smartphone business. Even the third-largest player Videocon may not have done it yet, but it has now decided to build separate products for online, said chief operating officer CM Singh.

Whirlpool India vice president (corporate affairs and strategy) Shantanu Dasgupta said the way e-commerce has evolved in India has generated newer thinking in companies. “This is something we have to work on actively and also ensure transparency to consumers. This is an established practice in bigger parts of the world,” he said.